Councils are in a financial crisis

LOCAL government is in a financial crisis, according to Shires Association president Bruce Miller.

One in four NSW councils are on the brink of being unable to pay for services they have an obligation to provide, he says.

Mr Miller says the NSW government has forced councils to pay for essential services such as health, dental, childcare, waste recycling and policing while severely restricting their income through rate-pegging.

“That’s been the case for a number of years. It’s certainly nothing new,” Cr Hoban said.

“As each year goes by it’s getting closer and closer to breaking point. Why would anyone logically starve a council of funds?”

Cr Hoban said it wasn’t just rate-pegging that kept council ‘behind the eight-ball’, so too was the ‘erosion of Grants Commission funds’.

She said in the current climate, councils had to review their operations to ensure they were efficient, try to increase revenue (Nambucca Shire has asked for a one per cent increase above the rate pegging level) and to reduce services and/or assets.

Funding through the Federal Roads to Recovery program and the national economic stimulus package has kept local government viable, despite the global financial crisis. But that funding will run out, Mr Miller warned.

“Regional councils pay for services which, in the city, fall to the State Government, including establishing health clinics for which they levy little or no rent,” Mr Miller said.